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Chapman and Cutler has worked hard over the years to build a solid reputation in the specialized area of lending to private equity firms. Working in the often frenetic world of private equity is a challenging business. We help our clients meet that challenge by structuring the right deal in a timely manner while minimizing their credit and legal risk.

Financial sponsors have become an important part of the world of corporate finance. As the amount of capital in private equity funds has mushroomed over time, banks have devoted significant attention to meeting the debt-financing needs of their equity sponsor customers. At Chapman, we work closely with our banking clients to structure and document the debt side of private equity transactions. We also spend significant time advising clients on the legal and financial risks posed by these transactions.

Our private equity lending practice has two basic facets. The first includes loans to portfolio companies (generally secured by all assets), which provide the necessary senior bank leverage to boost equity rates of return to acceptable levels. In these transactions, we structure, draft and negotiate secured acquisition and refinancing loans for our banking clients. We also negotiate with the holders of subordinated debt to arrive at acceptable, market-driven subordination and business terms.

The other side of our private equity lending practice involves loans made to the equity funds themselves, as well as loans made to portfolio companies and guaranteed by equity funds. These loans often provide bridges to capital calls or meet other short-term needs of the funds. To facilitate these transactions, we help our clients review and understand the equity funds' partnership structure, as well as draft and negotiate the loan documentation.

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